Exporttrade Corporation v Irie Blue New Zealand Limited HC Auckland CIV-2008-404-007130 [2010] NZHC 2445 (22 December 2010)

Last Updated: 18 November 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2008-404-007130}

BETWEEN EXPORTRADE CORPORATION Plaintiff

AND IRIE BLUE NEW ZEALAND LIMITED First Defendant

AND EDITH SHELLEY ROZANNE GRIBBLE AKA ROZANNE GRIBBLE

Second Defendant

AND SCOTT GEOFFREY GRIBBLE AKA SCOTT GRIBBLE

Third Defendant

Hearing: 14 July 2010

Appearances: G J Thwaite for the Plaintiff

H Fulton for the Defendants

Judgment: 22 December 2010

_{JUDGMENT OF DUFFY J}

This judgment was delivered by Justice Duffy on 22 December 2010 at 1.00 pm, pursuant to r 11.5 of the High Court Rules

Redelivered 1.30 pm 25/2/11 as per minute of Duffy J of 24/2/11

Redelivered 4.00 pm 11/3/11 as per minute of Duffy J of 11/3/11

Registrar/Deputy Registrar

Date:

Counsel: H Fulton P O Box 5577 Wellesley Street Auckland 1141 for the Defendants

_{Solicitor: G J Thwaite P O Box 6239 Wellesley Street Auckland 1141 for the Plaintiff}

EXPORTRADE CORPORATION v IRIE BLUE NZ LTD and ORS HC AK CIV-2008-404-007130 22 December

2010

[1] This is a review of a decision of an Associate Judge dismissing a protest to jurisdiction raised by the three defendants in this proceeding.

[2] The plaintiff has commenced proceedings against the defendants which include as the first cause of action a claim brought by way of summary judgment to enforce a foreign judgment. It was obtained from the Florida United States of America Circuit Court (the Florida judgment) by default, and in circumstances where at all relevant times the defendants were outside the territorial boundaries of that state.

[3] There is no arrangement between New Zealand and Florida under the Reciprocal Enforcement of Judgments Act 1934, and so the only means of enforcing the Florida judgment in this country is under the common law. The question, therefore, is whether the Florida judgment meets the New Zealand common law tests for the enforcement of a foreign judgment in this country. In particular, the issue is whether the Florida judgment is a nullity because it assumes jurisdiction over foreign nationals in a foreign country.

[4] The Florida judgment is for the sum of US$288,718.50, plus interest. The defendants contend that the Florida Court did not have jurisdiction to enter judgment against them because:

a) they were neither present nor resident in Florida, or elsewhere in the United States of America, at the time the proceedings giving rise to the Florida judgment were instituted;

b) they did not submit to the jurisdiction of the Florida Court;

c) they were not served with the Florida proceedings; and

d) they did not appear in the proceeding before the Florida Court.

[5] The defendants also deny knowledge of the issues which led to the Florida Court entering judgment against them. However, I do not need to deal with these issues for the purpose of determining this review.

[6] The Associate Judge dismissed the protest to jurisdiction for a number of reasons. However, he determined at [61] that an enquiry as to lawfulness was one which “is more related to the merits of the case; examining whether in the circumstances described the Florida Court had proper purpose in hearing the case”. This view of when an enquiry into lawfulness should take place was later confirmed in [62].

[7] I consider that the Associate Judge was wrong to conclude that the lawfulness of the Florida Court’s assumption of jurisdiction over the defendants was not something he could determine as part of the protest to jurisdiction. When it comes to attempts to enforce foreign judgments in this country, a defendant who pleads that the foreign judgment is unenforceable through want of jurisdiction can raise this defence through a protest to jurisdiction and seek a stay or dismissal of the proceeding: see Von Wyl v Engeler [1998] 3 NZLR 416 (CA).

[8] In Von Wyl, the plaintiff obtained a judgment from a Swiss Court relating to payment of capital gains taxes owed by the defendant, but which the plaintiff (as purchaser of the taxable asset) had by Swiss law been obliged to pay. The plaintiff then filed a claim in the High Court at Whangarei for summary judgment and sought recovery of the money owing under the Swiss judgment. The defendant responded by protesting the jurisdiction of the High Court to enforce the Swiss judgment. No one in either the High Court or the Court of Appeal questioned the appropriateness of using this procedure for the purpose of determining if the Swiss judgment was enforceable.

[9] Rule 5.49 of the High Court Rules sets out the procedure for objecting to jurisdiction. Rule 5.49(1) provides that a defendant who objects to the jurisdiction of the Court to hear and determine the proceeding may, instead of filing a statement of defence, file an appearance and his or her objection and grounds for objection. Andrew Beck and Others McGechan on Procedure (looseleaf ed, Brookers) at [HR 5.49] describes the rule as permitting a defendant to object to jurisdiction in lieu of filing a statement of defence. At a hearing, the Court, once satisfied that it has no jurisdiction, must dismiss the proceeding.

[10] In the present case, the defendants’ argument is that this Court has no

jurisdiction to enforce the Florida judgment. This argument meets the criteria of r

5.49 and is something that can properly be determined by this procedure. The availability of this procedure under the former High Court Rules equivalent was well established: see Biddulph v Wyeth Australia Pty Ltd [1994] 3 NZLR 49 (HC) at 57. Rule 5.49 has not changed anything in this regard.

[11] I now turn to consider if this Court lacks jurisdiction to enforce the Florida judgment.

[12] Foreign judgments are enforced in New Zealand by bringing an action at common law, which is what has occurred here, by registering the judgment under the Reciprocal Enforcement of Judgments Act, or by registering a memorial of the judgment under the Judicature Act 1908: see Laws of New Zealand Conflict of Laws: Jurisdiction of Foreign Judgments (online ed) at [38]. Only the first possible course is relevant to this case. The occasions when an in personam judgment of a foreign court will be recognised in New Zealand to bind a judgment debtor are well established. A summary of them is set out in Laws of New Zealand Conflict of Laws: Jurisdiction of Foreign Judgments (online ed) at [67]:

(1) if the judgment debtor was resident in the [foreign] country at the time proceedings were instituted, and possibly if he or she were merely present in the country at that time;

(2) if the judgment debtor was the plaintiff, or counterclaimed, in the proceedings in the foreign Court;

(3) if the judgment debtor submitted to the jurisdiction of the foreign

Court by voluntarily appearing in the proceedings;

(4) if the judgment debtor had agreed before the commencement of the proceedings to submit to the jurisdiction of that Court, or of the Courts of that country, in respect of the subject-matter of the proceedings.

[13] A further common law requirement for the enforcement of foreign judgments is that the jurisdiction of the foreign court over the judgment debtor should accord with the conflict of laws rules of the Court in which the enforcement is sought: see Sir Lawrence Collins (ed) Dicey, Morris and Collins on the Conflict of Laws

(14th ed, London, Sweet & Maxwell, 2006) vol 1 at [14-049] citing from Sirdar

Gurdyal Singh v Rajah of Faridkote [1894] AC 670 at 683-684:

All jurisdiction is properly territorial ...and extra territorium jus dicenti, impune non paretur.

In a personal action, ... a decree pronounced in absentem by a foreign court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey i; and it must be regarded as a mere nullity by the Courts of every nation, except (when authorised by special local legislation) in the country of the forum by which it was pronounced.

[14] In Von Wyl, the Court of Appeal confirmed and applied the above principles. At 421, it explained the import of those principles as having the effect of precluding a foreign court from entering judgment against a defendant who was outside the territorial boundaries of its jurisdiction, and who had not submitted in any way to that court’s jurisdiction:

The foundation of the jurisdiction in personam is service of the writ or other originating process. Personal service on a defendant present within the jurisdiction and, where it is impracticable to serve the proceeding in the prescribed manner, substituted service within the jurisdiction by taking such steps as the Court may direct to bring the proceeding to the defendant’s notice, satisfy that requirement. And it seems there is no jurisdiction to order substituted service within the jurisdiction on a defendant who was outside the jurisdiction when the proceeding was issued

[15] When it came to determining if a defendant outside the jurisdiction of a

foreign court had submitted to that court’s jurisdiction, the Court of Appeal found (at

421) that the onus was on the party seeking to enforce the foreign judgment to establish that the non-resident accepted the jurisdiction of the foreign court to determine the proceeding.

[16] In Von Wyl, the plaintiff could not establish that the defendant, who at all relevant times was resident in New Zealand, had submitted to the jurisdiction of the Swiss court. Thus, the protest to jurisdiction was successful, and the judgment of the Swiss court could not be enforced against the defendant.

[17] It follows that in the present case, it is for the plaintiff to establish that either the defendants were within the territorial jurisdiction of the Florida Court at the time the proceedings were instituted, or they have in some other way submitted

themselves to the jurisdiction of that court. Whether the plaintiff can do so or not necessitates an examination of the statement of claim and affidavit evidence relied on by the plaintiff.

[18] In this case, the plaintiff has sought to enforce the Florida judgment by way of summary judgment. An officer of the plaintiff, Jeffrey Firestone, has filed an affidavit confirming the truth of the allegations pleaded in the plaintiff’s first amended statement of claim. That document has now been superseded by a second amended statement of claim. Whilst there is no affidavit to confirm the truth of its allegations, I consider that where it contains a repetition of the allegations in the first statement of claim, Mr Firestone’s affidavit can be relied upon to prove their truth as well.

[19] There is nothing in the second amended statement of claim which alleges that the defendants were present in Florida throughout the time the proceedings giving rise to the Florida judgment were in being, let alone when they were first issued. Nor is there anything in the second amended statement of claim which alleges that the Florida Circuit Court ordered that substituted service be served on someone in Florida, or on the defendants out of Florida. Though even if there were such allegations, it is doubtful that service of this nature would be recognised under New Zealand law as rendering the defendants subject to the Florida Circuit Court’s jurisdiction: see Von Wyl at 421 and Laurie v Carroll [1958] HCA 4; (1957-1958) 98 CLR 310 at

329.

[20] The second amended statement of claim expressly pleads that at all material times:

1. the first defendant was an incorporated company that was registered in New Zealand with its registered office in New Zealand;
   

b) the second defendant was ordinarily resident in New Zealand; and c) the third defendant was ordinarily resident in New Zealand

In addition, the second amended statement of claim pleads that the defendants were served with the Florida proceedings in Barbados.

[21] It would follow from these allegations that the plaintiff accepts that none of the defendants were present in Florida at any material time. Unless, therefore, the plaintiff can establish one of the other tests set out at [12], the Florida judgment will not be enforceable in a New Zealand court.

[22] There is nothing in the second amended statement of claim which alleges that the defendants have issued a counterclaim in the Florida proceedings, submitted to the jurisdiction of the state of Florida, or agreed before the commencement of the Florida proceedings to submit to the jurisdiction of that state.

[23] Thus, the plaintiff has failed to allege an essential allegation in its summary judgment claim to enforce the Florida judgment. Moreover, there is nothing in Mr Firestone’s affidavit which might provide the support the plaintiff requires.

[24] The plaintiff has failed to explain why the essential elements for the enforcement of the Florida judgment are missing from the second amended statement of claim. Instead, the plaintiff has focused on arguing that the defendants have either submitted to, or are estopped from denying submission to this Court’s jurisdiction. This approach caused the Associate Judge to direct his attention towards determining whether the defendants were resident in New Zealand, and therefore, subject to this Court’s jurisdiction. The question of their being subject to this Court’s jurisdiction is also relevant, because unless they are, this would be another reason for this Court being unable to enforce the Florida judgment against them. But this is a separate issue from, and it is no answer to, the one which the defendants have raised in their protest to jurisdiction.

[25] It is for the plaintiff to establish that the defendants have submitted to the jurisdiction of the state of Florida before this Court can enforce the Florida judgment. The plaintiff has failed to do so.

Result

[26] The application for review is granted. The Florida judgment is unenforceable by a New Zealand court. The plaintiff’s summary judgment proceeding to enforce the Florida judgment in New Zealand is, therefore, dismissed.

[27] The parties have leave to file memoranda on costs.

Duffy J

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2008-404-007130}

BETWEEN EXPORTRADE CORPORATION Plaintiff

AND IRIE BLUE NEW ZEALAND LIMITED

First Defendant

AND EDITH SHELLEY ROZANNE GRIBBLE AKA ROZANNE GRIBBLE Second Defendant

AND SCOTT GEOFFREY GRIBBLE AKA SCOTT GRIBBLE

Third Defendant

Date of Minute; 11 March 2011

Counsel: G J Thwaite for the Plaintiff

_{H Fulton for the Defendants}

_{MINUTE OF DUFFY J}

Counsel:

G J Thwaite, P O Box 6239, Auckland 1141. Fax: [phone]. Email: [e-mail]

H Fulton, DX CP24109, Auckland 1141. Fax: [phone]. Email: [e-mail]

[1] Following the issue of my judgment on 22 December 2010 (the judgment) the plaintiff filed an application seeking recall of the judgment or alternatively leave to appeal to the Court of Appeal. That application was brought about by concern on the part of the plaintiff that the effect of the judgment was to dismiss the proceeding in its entirety. However, the defendants did not read the judgment in that way. Nor do I.

[2] The judgment was a review of a decision of an Associate Judge setting aside the defendant’s protest to jurisdiction. That protest was made in relation to the first cause of action in the plaintiff’s statement of claim, which the plaintiff had sought to establish by way of summary judgment. The Associate Judge had allowed the summary judgment to proceed. However, the application for review was successful. I found that the Florida judgment was unenforceable by a New Zealand court, and therefore, the plaintiff’s application for a summary judgment to enforce the Florida judgment could not proceed. For that reason I dismissed the summary judgment application.

[3] It has come to my attention that in para [26] of my judgment, through a clerical error I have referred to “the plaintiff’s proceeding” to enforce the Florida judgment in New Zealand being dismissed, rather than to “the plaintiff’s summary judgment proceeding”. The lack of specificity in the reference to “proceeding” in para [26] generated the plaintiff’s concern that the effect of the judgment was to dismiss the entire proceeding of the plaintiff.

[4] The entire proceeding included causes of action which went beyond an attempt to enforce the Florida judgment in New Zealand. Thus the judgment could not have had the effect the plaintiff feared. Nonetheless, I acknowledge that a cautious plaintiff might well have been concerned about the scope of the judgment. For this reason I propose to cure the clerical error in para [26] of the judgment by using the slip rule under r 11.10 of the High Court Rules. The sentence in the judgment: “The plaintiff’s proceeding to enforce the Florida judgment in New Zealand is, therefore, dismissed”, will be corrected by the insertion of the words: “summary judgment” before “proceeding” so that the sentence reads:

The plaintiff’s summary judgment proceeding to enforce the Florida

judgment in New Zealand is therefore dismissed.

[5] The parties are agreed that the 22 December 2010 judgment makes the first cause of action in the amended statement of claim redundant. The parties have agreed a timetable to progress the remaining causes of action. They are agreed as follows:

[a] By 6 May 2011 the plaintiffs are to file an amended application to set aside the defendant’s second protest to jurisdiction which relates to causes of action 2-5 in the amended statement of claim and to file any affidavits in support.

[b] By 17 June 2011 the defendant is to file its opposition to the application and any affidavits in reply.

[c] By 8 July 2011 the plaintiff is to file any response.

[6] The second protest to jurisdiction application is not subject to the judgment of 22 December 2010, which relates to the plaintiff’s first cause of action only. The parties are agreed that the plaintiff is not prejudiced by the judgment of 22 December

2010 when it comes to the 2nd to 5th causes of action and the issue of jurisdiction

thereon. It follows that there is no further need for the plaintiff to pursue its application for recall of the 22 December 2010 judgment or for leave to appeal to the Court of Appeal. The application is, therefore, discontinued.

[7] Costs on the application to recall the 22 December 2010 judgment and for leave to appeal to the Court of Appeal are reserved.

Duffy J